2016 -- S 2531

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LC004239

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO TAXATION - SALES AND USE TAXES - LIABILITY AND

COMPUTATION

     

     Introduced By: Senators Pearson, Picard, and Lombardo

     Date Introduced: February 25, 2016

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-18-18.1 of the General Laws in Chapter 44-18 entitled "Sales

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and Use Taxes - Liability and Computation" is hereby amended to read as follows:

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     44-18-18.1. Local meals and beverage tax. -- (a) There is hereby levied and imposed,

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upon every purchaser of a meal and/or beverage, in addition to all other taxes and fees now

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imposed by law, a local meals and beverage tax upon each and every meal and/or beverage sold

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within the state of Rhode Island in or from an eating and/or drinking establishment, whether

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prepared in the eating and/or drinking establishment or not and whether consumed at the premises

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or not, at a rate of one percent of the gross receipts. The tax shall be paid to the tax administrator

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by the retailer at the time and in the manner provided.

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      (b) All sums received by the division of taxation under this section as taxes, penalties, or

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forfeitures, interest, costs of suit, and fines shall be distributed at least quarterly and credited and

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paid by the state treasurer to the city or town where the meals and beverages are delivered.

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      (c) When used in this section, the following words have the following meanings:

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      (1) "Beverage" means all nonalcoholic beverages, as well as alcoholic beverages, beer,

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lager beer, ale, porter, wine, similar fermented malt, or vinous liquor.

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      (2) "Eating and/or drinking establishment" means and includes restaurants, bars, taverns,

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lounges, cafeterias, lunch counters, drive-ins, roadside ice cream and refreshment stands, fish-

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and-chip places, fried chicken places, pizzerias, food-and-drink concessions, or similar facilities

 

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in amusement parks, bowling alleys, clubs, caterers, drive-in theatres, industrial plants, race

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tracks, shore resorts or other locations, lunch carts, mobile canteens and other similar vehicles,

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and other like places of business that furnish or provide facilities for immediate consumption of

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food at tables, chairs, or, counters or from trays, plates, cups, or other tableware, or in parking

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facilities provided primarily for the use of patrons in consuming products purchased at the

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location. Ordinarily, eating establishment does not mean and include food stores and

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supermarkets. Eating establishments does not mean "vending machines," a self-contained

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automatic device that dispenses for sale foods, beverages, or confection products. Retailers

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selling prepared foods in bulk, either in customer-furnished containers or in the seller's

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containers, for example "Soup and Sauce" establishments, are deemed to be selling prepared

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foods ordinarily for immediate consumption and, as such, are considered eating establishments.

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      (3) "Meal" means any prepared food or beverage offered or held out for sale by an eating

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and/or drinking establishment for the purpose of being consumed by any person to satisfy the

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appetite and that is ready for immediate consumption. All such food and beverage, unless

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otherwise specifically exempted or excluded herein shall be included, whether intended to be

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consumed on the seller's premises or elsewhere, whether designated as breakfast, lunch, snack,

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dinner, supper, or by some other name, and without regard to the manner, time, or place of

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service. For purposes of this section, the term "meal" shall not include food or beverages served

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complimentary or free of charge.

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      (d) This local meals and beverage tax shall be administered and collected by the division

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of taxation, and unless provided to the contrary in this chapter, all of the administration,

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collection, and other provisions of chapters 18 and 19 of this title apply.

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      In recognition of the work being performed by the streamlined sales and use tax

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governing board, upon passage of any federal law that authorizes states to require remote sellers

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to collect and remit sales and use taxes, the rate imposed under this section shall be increased

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from one percent (1%) to one and one-half percent (1.5%). The one and one-half percent (1.5%)

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rate shall take effect on the date that the state requires remote sellers to collect and remit sales and

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use taxes.

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     SECTION 2. This act shall take effect upon passage.

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LC004239

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION - SALES AND USE TAXES - LIABILITY AND

COMPUTATION

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     This act would provide that food and beverages served complimentary or free of charge

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would not be subject to the local meals and beverage tax.

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     This act would take effect upon passage.

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